It’s Time to Fine Tune Your Invoicing Process
When it comes to invoicing, most organizations put emphasis on speed, but speed is only one factor in building a well-run invoicing process. Speed without proper compliance can lead to big problems and, potentially, big losses for the organization.
How is your team tightening the eInvoicing process? Are you ensuring compliance to reduce entry errors, enforcing oversight of payments? And, if you are a global organization, are you complying with the local tax authority rules? Look at all stages of the invoice workflow to ensure its meeting your internal rules, while complying with external regulations.
Where to begin
One area to look at is supplier side invoicing. Like most organizations, you are creating contracts and negotiating prices with suppliers. While most of those follow the normal PO process (receive a PO, issue an invoice), directing suppliers to an invoice portal reduces processing time on your side, resulting in a quicker, more efficient process. And, when you allow a supplier to select and invoice pre-negotiated terms off of a contract, it’s a win-win for the supplier and buyer.
If you are part of a global organization, it can be tricky navigating all of the local sales tax issues across various countries and regions. There is no ‘one-process-fits-all’ approach when it comes to working across global boundaries, and you likely don’t want to restrict your business to one country for locating the best suppliers.
When working globally, look for invoicing software that can simplify the process and offer verification of local tax authorities, electronic signature, validation and archiving of eInvoices in compliance with local tax authority rules.
Apply better safeguards to prevent bad invoices
Avoid the exceptions that occur when suppliers submit the occasional invoice with a unit price that exceeds the PO price. Most eInvoicing tools have the ability to automate this process. The best tools ensure the price on invoices and POs match, and prevents price exceptions occurring from the start. This type of control prevents the needs for manual intervention to deal with exceptions. By implementing such controls, you can reduce the risk of overcharging and eliminate other costly errors.
Create a flexible approval process
The best performing organizations are often those that believe in the idea of ‘delegate, delegate, delegate.’ Put another way, it’s important to empower others in the organization to be able to do more of the work, rather than consolidating work with a few people. When it comes to invoicing, consider adding a little more flexibility to enable multiple invoice approvers and allow them to approve the invoice via the contract itself.
Proper invoicing is critical to your organization’s financial health and to the buyer-supplier relationship. Managed well, it can be a major advantage for your organization.